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Philippine trade deficit is rising

The Philippine Statistics Authority released a report that shows the country’s harsh reality: The Philippines is still a net food-importing country. In a report published on January 3, the PSA revealed that the agricultural trade deficit in the third quarter of 2018 expanded to $1.86 billion, from $1.3 billion a year ago. For the period, agricultural exports declined by 4 percent, while payments for imports rose 15.5 percent, according to PSA data.

When a country records a deficit in trade, it means that its import bill is bigger than its export earnings. In the case of the Philippines, figures from the PSA showed that expenditures for imports in the July-to-September 2018 period went up to $3.54 billion, from last year’s $3.06 billion. In contrast, export receipts settled at $1.68 billion, 4.3 percent lower than last year’s $1.76 billion. These figures mirror the country’s overall trade performance in September, when the balance of trade in goods recorded a deficit of $3.93 billion, more than double the previous year’s $1.75 billion.

While the share of payments for agricultural products in the country’s total import bill got bigger, that of farm exports declined to less than 10 percent, according to PSA data. This, after the Philippines’s balance of trade recorded deficits with four of its five major trading partners. Worth noting is the country’s total trade deficit with Asean, which was the largest at $1.07 billion. The Philippines imported more agricultural products from neighboring Southeast Asian countries. The United States, which recorded a trade surplus of $470.68 million with the Philippines, was the country’s second top source of food imports.

Japan was the top buyer of Philippine agricultural products, such as fruits, nuts and fish. The preference of Japanese consumers for Philippine fruits allowed the country to enjoy a trade surplus of $273.38 million in the third quarter of 2018. This, despite the fact that Manila continues to push for the further reduction of import tariffs on Philippine fruits under the Philippine-Japan Economic Partnership Agreement.

Read more on Business Mirror.

 

Source: Business Mirror
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